ending inventory increases therefore net income under AC and VC will be same Select one: True False
Q: Contrast the effects that LIFO vs. FIFO would have on ending inventory, net income and cash flow in…
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Q: Under the LIFO cost flow assumption during a period ofinflation, which of the following is false? A.…
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Q: 5. If a unit of inventory has declined in value below original cost, but the market value exceeds…
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Q: 1. Indicate the effects on gross profit the changes in volume, unit selling price, and unit cost.…
A: Gross profit is calculated by reducing the cost of goods sold from sales revenue. Thus, sales price…
Q: When inventory unit costs are increasing: Group of answer choices a)FIFO will result in higher…
A: FIFO refers to the method of inventory costing where items purchased first are sold first.
Q: Identify that if prices are rising, which inventory cost flow method will produce the highest amount…
A: solution Identify that if prices are rising, which inventory cost flow method will produce the…
Q: Which of the following statements is NOT true of Economic Order Quantity? O A. The economic order…
A: EOQ: Economic Order Quantity is basically the optimal quantity of number of orders which in turn…
Q: Explain whether the following situations, taken independently, would be favorable or unfavorable: (…
A: Favorable is the condition that is positive for a business. This implies that the variance or the…
Q: In times of decreasing prices, LIFO will result in ____ costs of goods sold and _____ ending…
A: FIFO: FIFO stands for First-In, First-Out. In this method inventory purchased first will be sell…
Q: Which of the following is NOT true regarding an income statement organized according to the…
A: An income statement is a financial statement that tracks both corporate revenue and expenses over a…
Q: Inventory Turnover Ratio shows the speed at which the Sales will be converted into cash. Select one:…
A: The ratio analysis helps to analyse the financial statements of the business.
Q: Under the lower of cost or market inventory valuation rule, market value of inventory is defined as:…
A: Market value is the price of an item/product prevailing in the market on the given date.
Q: Which of the following statements regarding the lower of cost and net realizable value (LCNRV) rule…
A: The rule of valuing the inventory at cost or net realizable value is also called as Prudence concept…
Q: Using Average - perpetual, how much is the cost of ending inventory per unit? Using Average -…
A: Under average cost method of inventory, average cost per unit of inventory is used for calculation…
Q: In a period of rising prices, the inventory cost allocation method that tends to result in the…
A: In the period of rising prices, method resulting in highest net income would be the method under…
Q: In a period of rising prices, FIFO will result in O lower net income than LIFO. lower net purchases…
A: Inventory valuation is the process by which the inventory of the entity is valued. It can be done…
Q: Which of the following performance measures will increase if inventory decreases and all else…
A: Return on investment measures the net earned on the assets employed by the business.
Q: During a period of rising inventory costs and stable output prices, describe how net income and…
A: First in first out Method (FIFO) First in first out method is one of the popular method which was…
Q: Zimt AG uses the FIFO method, and Nutmeg Inc. uses the LIFO method. Compared tothe cost of replacing…
A: If a company follows FIFO method, then the inventory will go based on first in first out. If a…
Q: When purchase prices are rising, which of the following statements is true? a.LIFO produces a…
A: FIFO method means first in first out which means that cost of goods sold valued at older prices and…
Q: Which of the following statements is true? OA. When a large proportion of income is spent on a…
A: To find: which of the following statement is true
Q: If costs are rising, which of the following will be true?a. The cost of goods sold will be greater…
A:
Q: Which inventory method will result in lower net income in a period of rising prices? Which inventory…
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Q: Which of the following may not result to the amount of cost of sales? a.Net purchases less net…
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Q: In a period of rising prices,a. cost of goods sold under LIFO will be less than under FIFO.b. gross…
A:
Q: 1) If the ending inventory is to be valued at approximately lower-of-cost-or-net realizable value,…
A: Cost to retail ratio may be defined as the division of cost of goods available for sale and retail…
Q: Which one of the following statements is true? a. Under conditions of rising prices, the LIFO…
A: Step 1 Last in, first-out (LIFO) is inventory method in which the costs of the most recent…
Q: Indicate by a (1), (2), or (0) whether each of the following events wouldprobably cause average…
A: Average annual inventory holding is a relationship between average inventory and cost of goods sold…
Q: Inventory Turnover Ratio shows the speed at which the inventory will be converted into sales. Select…
A: Introduction: Inventory turnover ratio is one of the financial ratios which is computed by any…
Q: If merchandise inventory is being valued at cost and the purchase price is steadily falling, which…
A: Inventory can be valued using many ways such as : FIFO LIFO Weighted Average Average cost
Q: 1. Which of the following assumptions is false in a cost-volume-profit analysis? Total sales and…
A: Since you have asked multiple questions, we will solve the first question for you. If you want any…
Q: In comparing the absorption and variable cost methods, each of the following statements is true…
A: Variable Costing:The variable costing is a method used to allocate the fixed manufacturing overhead…
Q: Compared to using the weighted average cost method to account for inventory, during aperiod in which…
A: First-in-First-Out (FIFO): In First-in-First-Out method, the costs of the initially purchased…
Q: Which of the following statements is true with regard to the gross profit ratio? An increase in…
A: Gross profit is an excess amount of revenue over its cost of goods sold.it measures profitability…
Q: When inventory costs rise and inventory quantities are not decreasing, what does the LIFO produces?
A: Last-in-First-Out (LIFO): In this method, items purchased recently are sold first. So, the value of…
Q: net realisable value of inventory would ______ cost.
A: Net Realizable value is the value received upon selling the asset less estimated cost to sell the…
Q: When a company determines that the net realizable value of its ending inventory is lower than its…
A: Lower of cost and net realizable value: The lower of cost and net realizable value is a method which…
Q: Which of the following statements is true regarding the lower of cost or net-realizable value (NRV)?…
A: Inventory means the stock of goods in which the businessmen deals. Every company wants to maintain…
Q: Which cost flow assumption generally results in the highest reported amount of net income in periods…
A: Solution: Under FIFO method, inventory is valued at latest purchase cost. Therefore in period of…
Q: A firm that uses LIFO accounting for inventory in times of rising investory costs will always report…
A: FIFO First in first out method is a method of inventory accounting wherein the units of goods…
Q: Which cost flow assumption generally results in the highest reported amount of net income when…
A: FIrst in first out or FIFO cost flow assumption provides highest net income when inventory prices…
Q: For companies using FIFO or LIFO, inventory on the balance sheet is valued at: OA. Replacement cost.…
A: The question is based on the concept of Accounting Standard on Inventory Valuation.
Q: Gross profit will be the: A. highest if LIFO is used and inventory costs are decreasing. B.…
A: Inventory valuation can be done based on following methods: a) FIFO: FIFO (First-in, First-Out) is a…
If production is equal to sales, FG ending inventory increases therefore net income under AC and VC will be same
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- In rimes of rising prices, the inventory cost method that will yield the highest cost of goods sold is (a) LIFO. (b) weighted-average. (c) FIFO. (d) none of the above.Blue Corporation uses the FIFO cost flow assumption. Presented below is information related to Blues inventory: Determine (a) the net realizable value for each item and (b the inventory value of each item using the lower of cost or net realizable value rule.When would using the FIFO inventory costing method produce higher inventory account balances than the LIFO method would? A. inflationary times B. deflationary times C. always D. never
- If merchandise inventory is being valued at cost and the purchase price is steadily falling, which method of costing will yield the largest net income? Select one: a. average cost. b. LIFO. c. FIFO. d. weighted average. e. All methods will result in the same figure of net income.Gross profit will be the: A. highest if LIFO is used and inventory costs are decreasing. B. highest if FIFO is used and inventory costs are increasing. C. lowest if LIFO is used and inventory costs are increasing. D. all of the aboveWhich cost flow assumption generally results in the highest reported amount of net income when inventory costs are rising? Explain.
- If costs are rising, which of the following will be true?a. The cost of goods sold will be greater if LIFO is usedrather than weighted average.b. The cost of ending inventory will be greater if FIFO isused rather than LIFO.c. The gross profit will be greater if FIFO is used ratherthan LIFO.d. All of the above are trueWhich of the following statements regarding the lower of cost and net realizable value (LCNRV) rule is true? a.The LCNRV rule is an application of the cost principle. b.When the net realizable value of inventory drops below the cost of inventory, an adjustment is made to decrease inventory to its net realizable value and decrease income. c.If a company uses the LCNRV rule, there is no need to use a cost flow assumption such as FIFO, or weighted average cost. d.When the net realizable value of inventory is above the cost of inventory, an adjustment is made to increase inventory to its net realizable value and increase income.In a period of rising prices,a. cost of goods sold under LIFO will be less than under FIFO.b. gross profit under FIFO will be higher than under LIFO.c. LIFO inventory will be greater than FIFO inventory.d. net income under LIFO will be higher than under FIFO.
- Net sales minus cost of good sold is equal to cost of ending inventory. T/FContrast the income statement effect of LIFO versus FIFO(on Cost of Goods Sold and Gross Profit) when ( a ) costsare rising and ( b ) costs are falling.Which of the following statements is true with regard to the gross profit ratio? An increase in cost of goods sold would increase the gross profit ratio (assuming sales remain constant). An increase in the gross profit ratio may indicate that a company is efficiently managing its inventory. An increase in selling expenses would lower the gross profit ratio. a.1 b.2 c.1 and 2 d.2 and 3
